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Company filesfraud lawsuitagainst KVEOIV JlltltY URBAN Herald Staff WriterA New York-based company has accused officials of KVEO-TV of fraud in a motion filed in federal bankruptcy court in Houston — and the company that has agreed to buy KVEO has filed a document requesting a court-or-dered interim trustee for the station.Hundred East Credit Corp., which is leasing KVEO its television tower and transmitters, says that the station, also known as Tierra Del Sol Broadcasting Corp., has been diverting” station ftinds to another company owned by some of the (station’s) current directors.KVEO’s assets are supposed to be frozen, pending a settlement of a bankruptcy claim filed in federal court in Houston.The New York company has an interest because it says KVEO is in default on lease payments by more than $800,000.The fraud claim appears to be buttressed by another motion filed in federal court by Guadalupe South Texas Communications, a company which in April agreed to buy the station for $8 million. Guadalupe South Texas Communications is incorporated in Texas, however, a Milwaukee investment firm owns the company.Guadalupe says that KVEO’s board of directors Darrell Davis, Ed Gomez and Sonny Martinez arranged with Johnny Canales, a former employee of debtor (the station), to terminate his employment agreement ... and to establish a separate production company with the result that substantial revenues that otherwise would have gone to Movant (Guadalupe) are being diverted to such production company controlled by such directors although debtor continues to bear the expenses of such production.Davis told The Herald today that, There is no foundation and fact to that (to allegations that a separate company has been formed to divert funds).”Guadalupe claims it advanced KVEO-TV nearly 1200,000, according to the motion prepared by Milwaukee attorney John P. Miller and Houston attorney Kaaran E. Thomas. The company wants the court to order an interim trustee to operate the station because the station will be unable to repay funds advanced unless a trustee is appointed immediately to protect the estate pending trial on the merits of the involuntary petition commencing this case.The motion adds that the station is $9.5 million in debt, besides another $1 million of claims which KVEO disputes.The motion filed by the company which leases the tower and equipment also said that the station wrongfully executed an agreement purporting to convey to another television station an interest in Movant’s transmitting tower. The last sentence in the quote refers to KZLN, the public television station which recently went off the air because of financial difficulties.
Newspaper Details
Brownsville Herald
Brownsville, Texas, US
Thu, Oct 20, 1983
Page 12
Full Page
Clipped by
Sammi B.
NA 08 Feb 2020
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